FIFA Fiasco: Sponsors Scurry for Accountability, Face Reputation Risk

BySamuel Rubenfeld

International soccer is mired in yet another crisis, this time just before the World Cup kicks off in Brazil.

Reuters

A man walks past graffiti by Brazilian artist Rodolfo Turini, covered over with the words “FIFA go home” in reference to the 2014 World Cup, in Sao Paulo on May 28.

Corruption allegations over the winning 2022 tournament bid by Qatar sent sponsors running to the hilltop demanding accountability. Following a series of reports by the Sunday Times of London alleging bribery and corruption in the Qatari bid, top sponsors of FIFA, international soccer’s governing body, began over the weekend to demand an investigation into the allegations. Sony was first, with the others pilingon. As of late Monday, five of the six FIFA partner sponsors issued statements relating to the Qatar bid.

While Qatar remains confident it will retain its bid for the 2022 World Cup as it denies the corruption allegations, FIFA’s reputation around the world ahead of the tournament, hosted by Brazil, has never been worse. In addition to transit strikes in Sao Paulo, Brazil has faced massive protests over World Cup spending, with more planned during the tournament, as well as anti-FIFA graffiti that has gone viral. And the companies most closely tied to the soccer body could face reflective reputation problems as a result, experts said to Risk & Compliance Journal.

Ernest DelBuono, who chairs the crisis practice at Levick, said the companies sponsoring FIFA should have done major risk assessments before signing onto the partnership. “First and most important,” he said,” is [risk] at the global level: What is the risk to the brand globally?

“Is someone in the U.S. or Canada going to not buy Coke or Adidas as a result of the World Cup protests? What could be the lasting effect in Brazil and South America?” he asked. “You could have two different outcomes regarding damage to the brand.”

To that end, Jeff Thinnes, the chief executive and co-founder of JTI Inc., a compliance and communications strategy firm, noted that corporate sponsors can become subjects of frustration and be seen as being complicit with graft by their mere presence at an event like the World Cup.

“It’s tough to see why one would want to be associated with it,” he said. “The only reason is soccer. Exposure outside Brazil could outweigh any negative experience in the country during the World Cup.”

But will the move this late in the game by companies to seek accountability mollify FIFA’s critics? It doesn’t appear so. Dave Zirin, the sports journalist who recently wrote a book about Brazil’s World Cup, penned an op-ed calling for FIFA to be abolished. John Oliver, the comic with a show on HBO, slammed the organization as “cartoonishly evil” in a scathing 13-minute long segment Sunday night.

“With critical mass being reached in the media about about yet another FIFA scandal, tepid statements of concern from FIFA sponsors are expected and nothing new,” said David Larkin, a sports lawyer who co-leads the pressure group ChangeFIFA. “History teaches that such statements will have little real effect with sponsors doing nothing and demanding little.”

FIFA President Sepp Blatter responded Monday to the Qatar allegations by saying the British press was racist, blasting critics as being out to destroy FIFA and saying the soccer community must remain unified. On Tuesday, Mr. Blatter faced criticism from the European soccer governing body, whose officials said he didn’t tackle corruption, but he still received backing from regional associations for a fourth term as president.

Meanwhile, Mr. Thinnes said Brazil winning the tournament could be the only salve for people’s feelings about corruption and the alleged deceit that went into World Cup preparation. “Anything short of bringing home gold will leave some residual discontent and tarnish the companies that participated,” he said.

Write to Samuel Rubenfeld at Samuel.Rubenfeld@wsj.com. Follow him on Twitter at @srubenfeld.

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